Should I Pay an Account Balance or a Statement Balance?

The terms "account balance" and "statement balance" are often associated with a given account, such as a debit or credit card account. When you receive your credit card bill, for example, you are presented with your statement balance. The figures for both the statement and account balances can be identical or can differ significantly, depending on how much you use your card. Whether you should pay off your account balance or statement balance depends on your personal finances.

Account Balance

An account balance is the balance on a credit card or debit account at a given moment. It is the sum of all individual transactions that have occurred on the account to that point. The amount owed on a credit card is represented by a positive figure, and a negative number indicates that the card holder has paid more than the account balance. A checking or savings account linked to a debit card will have a negative account balance if money is owed.

Statement Balance

A statement balance is the balance on the account after a given billing period. Once a month, a billing statement is issued to the card holder indicating the monthly balance of the credit card in the card holder's name. The statement balance indicates how much the card holder has spent and payments he has made during the previous billing cycle. If your credit card has a statement balance of $100 and you make no further purchases or payments, the account balance and the statement balance are identical until the next statement balance is issued. If you do not pay off the balance by the due date, interest will be charged on the remaining balance, which will be reflected in the next balance statement.

What to Pay

It is best to pay your account balance to be certain you avoid interest fees. However, if your account balance is large and you cannot afford to pay off the entire balance, look at your bill statement. It indicates a minimum payment requirement, which is the minimum sum you must pay to avoid late fees. This minimum payment does not prevent interest from being charged, however. The minimum payment is often a fraction of the entire statement balance, but you must pay the entire balance to avoid interest charges. Paying the entire statement balance will prevent you from paying interest fees, although it will not eliminate the entire balance owed if you have made purchases since the billing period ended. The only way to pay off your entire balance is to pay the account balance. You can determine the account balance by calling the credit card company or by checking your balance online.

Additional Information

The transaction summary on your credit card bill provides details about all transactions that have occurred on your credit card -- including purchases, payments and any fees and interest charges. Examine each of these transactions to ensure it is accurate. Although your credit card company tries to inform you of credit card fraud, fraud does occur with smaller transactions as well.